Flybe, the UK regional airline that went bankrupt in March, could be flying again early next year after being bought by a former shareholder. The carrier, which collapsed after loan talks with the government fell through as the coronavirus hit passenger numbers, has been sold to a company run by secretive hedge fund executive Lucien Farrell. The Exeter-based airline’s new owner will be Thyme Opco, affiliated with Farrell’s hedge fund Cyrus Capital, said administrator EY. “We expect to create valuable airline industry jobs, restore essential regional connectivity in the UK and contribute to the recovery of a vital part of the country’s economy,” said Thyme Opco. It added that the airline, which was the largest regional air carrier in the EU carrying about 8m passengers a year between 81 airports in the UK and Europe, will be downsized for its return. The airline will “start off smaller than before”, it said. EY’s Simon Edel said: “The restart of this iconic brand, which was once Europe’s largest regional airline, will provide a potentially significant boost to aviation jobs, regional connectivity and local economies.” Farrell, who has run Cyrus Capital in Europe for 15 years, has made a name as a canny investor in distressed debt, while carefully preserving his privacy. He has expanded Cyrus into a powerhouse of distressed investing, building up stakes in struggling UK household names such as the Co-operative Bank. Cyrus injected money into Flybe as part of a rescue spearheaded by Virgin Atlantic in 2019, but the company fell into administration when last-ditch rescue talks with the government for a GBP100m loan broke down in March. The failure of the rescue talks put more than 2,000 jobs at risk and raised uncertainty over the continuation of many regional air routes in the UK.<br/>
unaligned
Tony Fernandes is one of Asia’s most marketing-savvy entrepreneurs, often drawing comparisons with Richard Branson, the British entrepreneur behind Virgin and his one-time mentor and boss. The Malaysian tycoon bought AirAsia for less than $1 in 2001 and turned it into one of the largest low-cost carriers in the region. But now, Fernandes is facing one of his toughest challenges as the coronavirus pandemic pummels his business. AirAsia X, his long-haul airline, is saddled with Rm63.5b ($15.3b) of debt and earlier this month it unveiled a restructuring plan to cope with “severe liquidity constraints”. AirAsia X’s deputy chairman told local media at the weekend the unit had “run out of money”, adding it was liquidating its Indonesian business and writing down its 49% stake in Thai AirAsia X. The long-haul arm’s share price has plunged 77% this year. AirAsia, the heart of Fernandes’s empire, is facing its own struggles and the airline’s share price has fallen 65% in 2020. The company has pulled out of Japan and its Indian airline, a joint venture with the Tata Group, has come under renewed scrutiny after reports the Malaysian business had stopped funding it. Fernandes denied the claim. The crisis has forced AirAsia to seek financial support from the Malaysian government for the first time. “In 19 years, we’ve never [had] any necessity to ask for a government-backed loan,” Fernandes said. “This is solely out of Covid, where we lost so much of our sales.” Fernandes’s difficulties are indicative of the existential challenge facing the airline sector, with travel restrictions wiping out passenger traffic worldwide. But some analysts also suggest the group has overstretched, even if a collapse remains unlikely. AirAsia quit Japan months after EY, the group’s auditor, said the pandemic had cast “significant doubt” on the carrier’s ability to continue as a going concern. Story has more.<br/>